Unpacking July’s home prices and sales data
July was another month when the local Home Sales Report chronicled new records or had data that was almost a record. That makes it an opportune time to unpack some of that data for a closer look to get some context and insights into how the local market is doing.
The regional typical sales price of $244,900 wasn’t an all-time high. That benchmark was set in May at $250,000. The region’s median price has been in the $220,000 to $250,000 price range five out of seven months this year.
A seller who closed a typical deal in July pocketed $88,650 more than a typical sale in July 2019 – the year before the pandemic. The numbers get bigger when you drill down to city and community markets.
The average Piney Flats existing home sales price broke the half-million-dollar mark last month. It was $533,700. And almost half of that submarket’s sales were in the $500,000 and above price range, so it wasn’t a skewed number.
It’s not likely that that price is sustainable. But Piney Flats resales have consistently been in the $400,000 and above range all year. So, it has established itself as one of the region’s priciest markets. Jonesborough, Gray, and Johnson City are also members of that club.
A distinction that must be noted when looking at prices is the difference between the median and average.
The average is a good broad measure of the overall market. Its disadvantage is one or two very big or very small sales will skew the average higher or lower. For example, during the bottom of the Great Recession, distressed sales for below-market prices distorted some submarket’s value. The median sales price is a better market value indicator since it is the sales mid-point.
July’s median resale price in Piney Flats was $460,950, so half of the sales were for more than that amount, and half were for less. A list of the submarket sales numbers and average and median sales prices can be found on the NETAR website on the July Home Sales Report. https://netar.us/sellers-increase-listing-prices-again-in-july/
Although mass media and the internet are clogged with stories about sellers cutting prices, that hasn’t happened here. In fact, the only indication that sellers are taking note of the gradual slowing of the market is the growth rate for listing prices has been declining. But the overall price is up. Last month it was $279,900. That was a record for the region and $44,950 higher than it was at the beginning of the year. Sellers have increased their asking price every month this year.
There’s not a lot of hope for a late summer change since mortgage rates are back below 5%. That and a slowly increasing number of new listings may set the stage for a late-summer-early-fall sales bounce.
Sales have slowed for three of the past four months. At the beginning of the month, the closing count was 793. That number will increase with the mid-month update when all the sales in the late processing group are finished.
The noteworthy thing about July’s sales is for the first time this year, they were lower than they were at the pre-pandemic benchmark. That’s important because it compares current sales volume to our normal market before the craziness of the pandemic and early post-pandemic years.
New listing and active inventory are beginning to look more like a typical market than anything we’ve seen for the past three years. The increase is small. There were an additional 151 listings from June. It’s a good sign, but in a market averaging about 27 sales a day, it doesn’t offer buyers a lot of relief.
At the end of July, the region had 1.5 months of inventory.
We have a long way to go before getting back to balanced market conditions – five to six months of inventory.
NETAR is the voice for real estate in Northeast Tennessee. It is the largest trade association in the Northeast Tennessee, Southwest Virginia region, representing over 1,800+ members and 100+ business partners involved in all aspects of the residential and commercial real estate industries. Weekly market reports and information for both consumers and members are available on the NETAR website at https://netar.us